Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model. NEW YORK ( TheStreet) -- SI Financial Group (Nasdaq: SIFI) has been downgraded by TheStreet Ratings from buy to hold. The company's strengths can be seen in multiple areas, such as its expanding profit margins and solid stock price performance. However, as a counter to these strengths, we also find weaknesses including disappointing return on equity, feeble growth in the company's earnings per share and deteriorating net income.
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- SIFI, with its decline in revenue, slightly underperformed the industry average of 8.6%. Since the same quarter one year prior, revenues fell by 11.3%. Weakness in the company's revenue seems to not be hurting the bottom line, shown by stable earnings per share.
- The gross profit margin for SI FINANCIAL GROUP INC is currently very high, coming in at 74.50%. Regardless of SIFI's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, SIFI's net profit margin of 6.10% is significantly lower than the same period one year prior.
- Compared to where it was a year ago today, the stock is now trading at a higher level, regardless of the company's weak earnings results. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry, implying reduced upside potential.
- SI FINANCIAL GROUP INC reported flat earnings per share in the most recent quarter. The company has suffered a declining pattern earnings per share over the past two years. During the past fiscal year, SI FINANCIAL GROUP INC reported lower earnings of $0.24 versus $0.28 in the prior year.
- The company's current return on equity has slightly decreased from the same quarter one year prior. This implies a minor weakness in the organization. Compared to other companies in the Thrifts & Mortgage Finance industry and the overall market on the basis of return on equity, SI FINANCIAL GROUP INC underperformed against that of the industry average and is significantly less than that of the S&P 500.
-- Written by a member of TheStreet Ratings Staff